ABI Data Shows Motor Fraud Hit £576 Million as Drivers Foot the Bill

• The Association of British Insurers found 51,700 fraudulent motor insurance claims worth £576 million in its latest annual fraud data, up 5 percent on the year before.
• Motor claims made up 53 percent of every fraudulent insurance claim detected across the whole industry, more than any other type of policy.
• Insurers also stopped 684,800 fraudulent applications before a policy was even issued, a rise of 7.4 percent, and the ABI says the cost of fraud is passed straight on to honest drivers through higher premiums.

Motor Fraud Hit £576 Million, and Every Honest Driver Pays a Share of It

Every driver who has watched their car insurance renewal quote climb again this year, sometimes by a considerable margin, has a right to ask exactly where the money is going. Part of the answer, according to the Association of British Insurers, is fraud committed by other people entirely. The ABI’s latest annual detected fraud data shows insurers uncovered 51,700 fraudulent motor claims worth £576 million, a rise of 5 percent on the year before, and motor policies alone accounted for 53 percent of every fraudulent claim detected across general insurance in the UK.

The ABI represents more than 300 insurance and long-term savings firms, and its fraud figures are compiled from data its member companies report each year. Fraud across all classes of general insurance, not just motor, totalled £1.16 billion, a 2 percent rise on the £1.14 billion detected the year before, from 98,400 fraudulent claims overall, up 12 percent. Property insurance was the next largest category behind motor, with 18,700 fraudulent claims detected worth £189 million, an 11 percent rise on the year before, but motor still dwarfed every other line of business both in the number of claims caught and their total value.

Who Pays When a Fraudulent Motor Claim Gets Through

Fraud on a motor policy does not stay contained to the person committing it. Every driver who pays their premium in full ends up covering a share of the payouts that go to fraudulent claims that slip past an insurer’s checks, and covering the cost insurers spend trying to catch the ones that do not. Mark Allen, Head of Fraud and Financial Crime at the ABI, put it plainly: “Fraud doesn’t just harm its victims. It drives up premiums for everyone and causes grave emotional distress.”

The breakdown shows domestic motor policies took the biggest hit, with the value of fraudulent claims on personal car insurance up £36 million, a rise of 9 percent on the year before. Commercial motor policies were comparatively stable, rising £1.7 million, or 1.3 percent.

How the Fraud Actually Works

The ABI’s data splits detected fraud into named categories rather than treating it as one problem, and the two named case studies published alongside the figures show how it plays out for real drivers. In one case, a father and son ran a “ghost broking” scheme, selling fake car insurance policies backed by forged documents. Victims believed they were covered and drove uninsured without knowing it, unaware they had no protection at all if they were ever in a collision. The scheme generated more than £61,000 before the pair, along with a third family member who tried to destroy evidence, were sentenced.

Exaggerated loss remains the most common form of fraud across every type of policy, where a genuine claim is inflated beyond its real value, and this category alone rose 10 percent to £466 million. The Insurance Fraud Bureau, which works alongside the ABI, runs a five-year strategy called Connected to Protect aimed at using shared data and intelligence across the industry to catch this kind of fraud earlier. Nik Jethwa, a Detective Chief Inspector at the City of London Police’s Insurance Fraud Enforcement Department, said ghost broking in particular “continues to be a serious threat to public safety and trust in the insurance sector”, leaving victims “uninsured and exposed to significant financial and legal consequences.”

What This Means for Your Premium

Insurers do not absorb the cost of fraud themselves. Every fraudulent claim that gets paid out, and every pound spent investigating claims that turn out to be fake, gets built back into the pricing models insurers use to set premiums for everyone else. The ABI has said publicly that tackling fraud is one of the few direct levers available to keep premiums down for the vast majority of drivers who never make a dishonest claim in their life.

That is separate from the wider premium pressures drivers are already facing on fuel, repair costs and parts, but it is one of the few areas where an individual driver’s own conduct plays no part at all in the price they end up paying. A driver with a clean record and a modest car still pays their share of a bill run up by criminals they will never meet.

Insurers are not just reacting to fraud after the event, either. The ABI’s figures show 684,800 fraudulent applications were stopped before a policy was ever issued, a rise of 7.4 percent on the year before. Application fraud covers cases where a driver misrepresents or hides information, such as an address, a driving history or a named user of the car, to bring the cost of a policy down. Every one of those blocked applications is a saving that keeps the pool of honest premiums lower than it would otherwise be, but the scale of the number also shows how often insurers are tested before a policy is even agreed. Address fraud in particular, where a driver gives a false address to claim a lower-risk postcode, remains one of the most common ways a driver tries to shave money off a quote, and it is also one of the easiest for an insurer to catch once a claim is made and the true address comes to light.

How to Protect Yourself From Motor Insurance Fraud

Ghost broking is the fraud type most likely to catch out an ordinary driver rather than an insurer, and it is worth checking a policy is genuine before paying for it. A legitimate insurer or broker will appear on the Financial Conduct Authority’s register, and a genuine policy document will carry a policy number that the insurer itself can confirm over the phone. Deals advertised only through social media, priced well below the market rate, or paid for in cash to an individual rather than a registered firm, are the classic pattern behind ghost broking cases.

Anyone who suspects they have bought a fake policy, or who spots a fraudulent claim being made in their name, can report it to Action Fraud on 0300 123 2040 or to the Insurance Fraud Bureau’s confidential Cheatline on 0800 422 0421. Reporting helps beyond the individual case: the ABI and the Insurance Fraud Bureau use reports from the public, alongside data shared between insurers, to build the cases that lead to prosecutions like the ghost broking conviction detailed in this year’s figures.

It is also worth checking a renewal quote against at least one other insurer every year rather than letting a policy roll over automatically. A sudden rise in price is not proof of fraud anywhere in the chain, but comparing quotes keeps a driver alert to unexplained changes and makes it far easier to spot a genuine problem, whether that is an error on a record or a mistaken claim linked to the wrong policy. Keeping a paper trail of every document, photo and communication tied to a claim also gives a driver the strongest possible position if an insurer ever queries a claim that is entirely genuine, and it shortens the time a genuine claim takes to settle if it is ever challenged.

Sources

Association of British Insurers, “Fraudulent insurance claims continue to top £1 billion”, published 17 November 2025: abi.org.uk